China's state development agency National Development and Reform Commission (NDRC) has ordered Meta to unwind its $2bn acquisition of AI startup Manus, signaling heightened regulatory control over foreign tech investments. The move, announced weeks before US-China trade talks, reflects NDRC's expanded role in enforcing national security policies over critical technologies.

The decision aligns with Beijing's strategy to tighten oversight of AI advancements, particularly as Manus' early R&D relied on Chinese engineers and data. State media framed the ruling as a crackdown on "offshoring" practices that bypass regulatory scrutiny. NDRC, once focused on economic planning, now coordinates cross-ministerial efforts in semiconductors, shipping, and AI—a shift mirroring Washington's Committee on Foreign Investment in the US (CFIUS).

Experts note this marks the first public case under NDRC's 2021 foreign investment review framework, designed to balance economic growth with security concerns. The agency's influence extends beyond tech, as seen in its 2023 directive to block shipping giants from Panama Canal operations. Analysts warn such interventions could deter foreign investment and fragment global tech supply chains.

Meta's leverage—including reliance on Chinese suppliers and advertiser revenue—underscores Beijing's strategic bargaining power. While NDRC denies immediate comment, the case highlights escalating tensions in tech governance, with implications for startups navigating China's evolving regulatory landscape.